Park National Corp. has a renewed focus on its Ohio operations and is looking for growth as the economy recovers.
Park National executives say they are seeing success by marrying the best of big banking with community banking. The company benefits from having both the scale of a larger organization and a community bank operation with local decision-makers.
Newark-based Park National Corp. operates 11 community banking divisions throughout 28 Ohio counties, plus one branch office located in northern Kentucky.
Park National together with its different banking divisions is the 10th largest bank in Ohio by combined deposits of approximately $4.9 billion as of June 30, according to the Federal Deposit Insurance Corp. The company has more than 2,000 employees.
In the Miami Valley, Park National’s divisions include Springfield’s Security National Bank, Clark County’s largest bank by deposit market share; Piqua’s Unity National Bank; and Greenville’s Second National Bank.
“We’re proud of our affiliation with Park. It brings a lot of additional technology and support and expertise to the affiliates,” said Bill Fralick, president of Security National.
Security, which has 22 branches across Champaign, Clark, Fayette, Greene, Madison and Warren counties, became part of Park National in 2001.
“If I’m sitting across the table from a customer, or any of our employees are meeting face-to-face with our customers or out in the community serving on boards, it’s Security National Bank. We’re the decision-makers. They know they can call me, they can call any one of our employees and they can get a decision,” Fralick said.
Park National has grown over the years by acquiring small community banks. Each bank has local managers with the authority to decide on loans and prices. Like independent community banks, the loan officers, tellers and managers are known and active in the communities.
While each operate separately, the group of community banks is owned by Park National Corp. The combined assets gives corporate the means to invest in new technologies such as mobile banking and keep up with government regulations.
On July 22, Park National announced with second-quarter earnings that David Trautman would succeed C. Daniel DeLawder as the company’s chief executive officer as part of a succession plan. Trautman, currently president, will become president and CEO Jan. 1. DeLawder will continue in his role as chairman.
With the leadership transition, Park National has no plans to change its business model.
Park National’s structure “is a strength because what it permits the local affiliate to do is speak with great confidence because they have the decision making authority in their hand. They know their customers,” Trautman said.
“The important thing we found, and this is customers telling us this, is that they like predictability. They like knowing pretty much what the answer, what the logic, what the theory behind the decision’s going to be, and if you have a relationship with someone, as our affiliate bankers do with their local communities, you get to understand how they think and how they make decisions,” he said.
“Now what we’ve discovered is many, if not most of our competitors, they just have different models which may or may not permit them to operate in a similar fashion.”
In 2007, Park National, seeking growth opportunities with a stagnant Ohio market for banking, bought Vision Bank with 17 offices in Florida and Alabama. It was the company’s first out-of-state acquisition. Vision was purchased before the full force of the national recession hit, and Park was dragged down by troubled loans in the ensuing crisis.
Park later sold Vision, closing the deal in 2012.
“When the agreement to sell Vision Bank was first announced on Nov. 16, 2011, we projected the sale would allow Park to focus on reducing troubled assets while re-focusing our efforts on the historical actions that made our Ohio-based very successful,” DeLawder said.
“We made great strides during 2012 and the first six months of 2013 are evidence the projections are being met,” he said.
Park National reported July 22 net income of $40.7 million for the first six months of 2013, compared to net income of $50.4 million for the same time period of 2012. Last year’s results include a gain from the sale of Vision Bank. Excluding the gain, 2012 net income from January to June would have been $36 million.
For the full year 2012, Park National reported profits of $78.6 million, down from $82.1 million in 2011.
Going forward, Fralick said Security National is looking to grow in its newest market, Springboro in Warren County.
In addition, Park National rolled out in June a mobile banking application and upgraded mobile product.
“We are staying up with the technology but we’re keeping that personal touch,” Fralick said. “We are going to win this war of stealing customers from other banks, quite honestly. The markets that we’re in are not growing, so it’s head-to-head competition with the other banks. We think we have a model in place that’s going to help us grow.”
Park National Corp.
What: Publicly traded bank holding company that operates 11 community banking divisions in Ohio, as well as specialty finance companies
Headquarters: 50 N. Third St., Newark
President: David Trautman
Chairman and Chief Executive Officer: C. Daniel DeLawder
Branches: 123 branches in 28 Ohio counties, plus one branch in Northern Kentucky
Security National Bank
What: A community bank division of Park National Corp.
Main office: 40 S. Limestone St., Springfield
President: Bill Fralick
Branches: 22 branches in six counties: Champaign, Clark, Fayette, Greene, Madison and Warren
Read a Q&A from our interviews with C. Daniel DeLawder, David Trautman and Bill Fralick online